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Attorney General Cuomo Announces $24 Million Medicaid Fraud Settlement With Three Home Health Agencies

NEW YORK, N.Y. (December 17, 2009) - Attorney General Andrew M. Cuomo and U.S. Attorney Benton J. Campbell today announced a settlement with three home health agencies resolving Cuomo’s lawsuit against one of them and three whistleblower lawsuits that alleged the agencies defrauded the Medicaid program. This is the largest settlement Cuomo’s Medicaid Fraud Control Unit has reached with the home health industry in New York State.

The settlement arises from the agencies’ use of hundreds of home health aides who had received little or no required training. The agencies sent these aides daily into the homes of New York’s elderly, frail and indigent to provide sensitive medical care. As a result, these aides caused Medicaid to be billed for millions of dollars for services they were not qualified to provide.

Under the terms of the settlement, B&H Health Care Services, Inc., known as Nursing Personnel Home Care (“Nursing Personnel”), a Brooklyn-based licensed home care service agency, along with Excellent Home Care Services, LLC (“Excellent”) of Brooklyn, and Extended Nursing Personnel CHHA, LLC (“Extended”) of Manhattan, both certified home health agencies, will return $23,963,100 to Medicaid, a program jointly funded by the state and federal governments. Of this amount, the State of New York will receive a total of $14,377,860.

“The size of this settlement underscores the seriousness of the allegations and the importance of vigorous oversight of the Medicaid program and the medical care of our loved ones,” said Attorney General Cuomo. “Being treated at home is an important option for many New Yorkers, and the companies that provide this service at taxpayer expense have an obligation to ensure that the health care workers they employ are qualified for the job.”

“This settlement reflects this Office’s commitment to investigate allegations of fraud committed on the Medicare or Medicaid programs, especially when the alleged fraud could impact the standard of care received by New Yorkers in need of medical assistance,” said Benton J. Campbell, U.S. Attorney for the Eastern District of New York.

“Our nation’s Medicare and Medicaid patients deserve nothing less than quality health care they can depend on,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “When home health agencies cut corners to avoid compliance with legal training standards, they seriously undermine the integrity of the care they provide.”

Medicaid requires home health aides - who primarily care for elderly patients, administer medication, and provide services such as catheter care, colostomy care and wound care - to successfully complete a training program licensed by the Department of Health or the State Education Department. All such aides must receive a minimum of 75 hours of training, including sixteen hours of supervised practical training conducted by a registered nurse.

Attorney General Cuomo’s “Operation Home Alone” has exposed a statewide range of fraudulent practices and schemes in the home health care industry by home health and personal care aides, the schools that train them, and the agencies that recruit and employ them. During the course of Cuomo’s industry-wide investigation, MFCU uncovered certain HHA training schools that sold fraudulent HHA certificates to individuals who had not received the required training. The investigation revealed that Nursing Personnel employed hundreds of HHAs with fraudulent certificates from the bad training schools. These HHAs were then assigned to work for Extended and Excellent and were sent daily into the homes of New York’s elderly, frail and indigent to provide sensitive medical care. The services provided were paid for by the Medicaid program.

The settlement is the result of a joint investigation led by Attorney General Cuomo's Medicaid Fraud Control Unit, the Civil Division of the United States Department of Justice, the United States Attorney for the Eastern District of New York, and the Office of Investigations for the U.S. Department of Health and Human Services' Office of Inspector General. The investigation included allegations from two whistleblowers, who filed "whistleblower" complaints under the New York State and federal False Claims Acts, which authorize persons who have uncovered fraud against the government to file a civil action against the alleged wrongdoer and come forward with information about the false claims to the Attorney General's Office or the Department of Justice. The False Claims Acts provide an incentive to whistleblowers, who may share in a portion of money recovered by the government on their claims. The Acts also provide protection against job retaliation for whistleblowing.

To date, the investigation has resulted in the convictions of aides operating with false credentials, schools that sell the false credentials, and licensed agencies that employ these unqualified aides. Other prosecutions are pending.

The settlement resolves allegations that Nursing Personnel, Extended and Excellent knowingly presented, or caused to be presented, false claims to Medicaid for reimbursement for home health care services provided by home health aides who had obtained HHA certificates without obtaining the requisite training. In addition to the payment of the settlement amount, all three agencies will be subject to the terms of a corporate integrity agreement entered into with the New York State Office of the Medicaid Inspector General on their continuing efforts to employ policies and procedures to ensure that all future home health aides (“HHAs”) are properly certified. Nursing Personnel must also employ an outside monitor who will report to OMIG and Cuomo’s office.

Today's settlements were initiated by lawsuits filed under the whistleblower provisions of the False Claims Act, which allow private citizens to file suit on behalf of the United States for fraud and share in any recovery. Maurice Keshner will receive approximately $1,693,343 from New York’s recovery from Nursing Personnel. Deborah Yannicelli will receive approximately $994,080 from New York’s recovery from Extended and Excellent.

Along with the rigorous enforcement of current laws through initiatives like “Operation Home Alone,” Attorney General Cuomo succeeded in persuading the legislature to pass legislation creating a statewide registry of certified home health aides to be developed and maintained by the state Department of Health. The registry will enhance the State’s ability to oversee the industry, provide potential employers with the ability to screen home health aides, and help to detect and deter fraud. A registry already exists for nurse aides that work in nursing homes. By creating a registry for home health aides, the state extends the same protections that exist in the nursing homes to care-dependent persons being cared for in their homes.

New Yorkers are urged to report cases of suspected fraud to the Attorney General’s toll-free Medicaid Fraud Hotline, at 1-866-NYS-FIGHT (697-3444).